By taking a portfolio approach to risk management, enterprises can optimize, rather than minimize, inherent risks.  However, if the inherent risks collectively fail to align with the enterprise’s risk appetite, risk responses need to be implemented. Response options include accepting the risk, avoiding the risk, and reducing the risk.

The costs of the reduction activities must be considered along with the benefits in order to fully determine the net benefit of each response. The net benefit estimation is critical in determining which risk response is most appropriate. One such reduction activity is business process management (BPM), which is also critical for effective enterprise risk management (ERM). By tying performance measurements for processes to strategic objectives, BPM can be an important tool for effectively managing risks from a portfolio perspective.

The goal of this module is to help students understand common risk response alternatives.

Module learning objectives:

- Utilize a formal approach for estimating the net benefit of risk response alternatives

- Evaluate risk response alternatives

- Understand business processes and their use in managing key risks

Module overview:

This module includes material for up to five 75-minute class periods.  The material is flexible and can be adapted to meet your needs.